ASHOK ANAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is an appeal under Section 260A of the Income Tax Act, 1961 [hereinafter referred to as 'the Act'] against the order of the learned Income Tax Appellate Tribunal, dated 13-10-2006 passed in I.T.(SS)A No. 50/IND/2003 for the block period 1987-88 to 1997-98. The appeal was admitted by a Bench of this Court vide order dated 5-9-2007 on the following substantial questions of law:

(2.) The relevant admitted facts, in brief, are that a search was conducted under Section 132 of the Act by the Income Tax Department in the residential premises of the Appellant. Thereafter, a notice dated 10-7-1997 (Annexure-A/1) was issued under Section 158BC of the Act. Pursuant to the aforesaid notice, Assessee furnished block return on 30-9-1997 for the period 1-4-1986 to 5-2-1997 declaring an undisclosed income to the tune of Rs. 29,44,546/. Notice of hearing under Section 143(2) of the Act was issued on 13-01-1998 (Annexure-A/3) which was served on the Appellant on 16-10-1998. Thereafter, assessment was completed ex parte under Section 144 of the Act vide order dated 26-2-1999 (Annexure-A/4). The aforesaid order was set aside by the Commissioner of Income Tax (Appeals) vide order dated 9-02-2001 (Annexure-A/5) for re-framing the assessment proceeding.

(3.) Thereafter, the assessment was re-framed by the Assessing Officer and an order was passed on 28-3-2002 (Annexure-A/6). Against the aforesaid order, the Assessee once again preferred an appeal whereby vide order dated 26-9-2003 (Annexure-A/11), the Commissioner of Income Tax decided the appeal in favour of the Assessee. He held that proviso to Section 143(2) of the Act is applicable also to proceedings under Section 158BC of the Act and since statutory notice was not issued within a period of one year as laid down in proviso to Section 143(2) of the Act, the block assessments made by the Assessing Officer were barred by limitation. The Commissioner of Income Tax further held that since entire block assessment has been set aside and has been re-framed from the return stage and since the Commissioner of Income Tax (Appeals) has not adjudicated any of the grounds, therefore, the Appellant has right to raise fresh or additional ground when the assessment has been re-framed afresh. Accordingly, it was held that it is permissible for the Assessee to raise an additional ground with regard to validity of the notice under Section 143(2) of the Act.